Philosophy

We believe companies with strong competitive advantages and moats from a fundamental and sustainability perspective, that have reinvestment opportunities at high returns on invested capital (ROIC), capable and rightly incentivized management teams and are undervalued over a long-term investment horizon have the ability to compound returns and generate attractive risk-adjusted excess returns throughout the economic cycle.

 

Main Objectives

1. SUPERIOR RISK-ADJUSTED RETURNS

2. BUSINESSES WITH STRONG COMPETITIVE ADVANTAGES

3. SUSTAINABILITY

 

 

Investment Selection

Integrated fundamental and sustainable research, supplemented by investigative research to uncover businesses that we believe posses strong fundamental and sustainable competitive advantages, growth and profitability, and thus have the potential to compound returns over the long term.

What makes a Sustainable International Leader?

Franchise Quality
  • Exceptional business model
  • Attractive reinvestment opportunities
  • Sustainable Business Advantage drivers
Quantitative Measures
  • ROIC meaningfully above cost of capital
  • High incremental ROIC
  • Strong cash flow generation
Investability
  • Probability weighted expected return
  • 5+ years investment horizon
  • Absolute cash flow value — not relative value
Management Quality
  • Track record of strong capital allocation
  • Management incentives are aligned

Leveraging Brown Advisory’s Global Equity and Sustainable Investing platforms

Vehicles Available: SMA and Mutual Fund

 


The views expressed are those of the author and Brown Advisory as of the date referenced and are subject to change at any time based on market or other conditions. These views are not intended to be and should not be relied upon as investment advice and are not intended to be a forecast of future events or a guarantee of future results. Past performance is not a guarantee of future performance and you may not get back the amount invested. The information provided in this material is not intended to be and should not be considered to be a recommendation or suggestion to engage in or refrain from a particular course of action or to make or hold a particular investment or pursue a particular investment strategy, including whether or not to buy, sell, or hold any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable. To the extent specific securities are mentioned, they have been selected by the author on an objective basis to illustrate views expressed in the commentary and do not represent all of the securities purchased, sold or recommended for advisory clients. The information contained herein has been prepared from sources believed reliable but is not guaranteed by us as to its timeliness or accuracy, and is not a complete summary or statement of all available data. This piece is intended solely for our clients and prospective clients, is for informational purposes only, and is not individually tailored for or directed to any particular client or prospective client.

Sustainable investment considerations are one of multiple informational inputs into the investment process, alongside data on traditional financial factors, and so are not the sole driver of decision-making. Sustainable investment analysis may not be performed for every holding in the strategy. Sustainable investment considerations that are material will vary by investment style, sector/industry, market trends and client objectives. The strategy seeks to identify companies that it believes may be desirable based on our analysis of sustainable investment related risks and opportunities, but investors may differ in their views. As a result, the strategy may invest in companies that do not reflect the beliefs and values of any particular investor. The strategy may also invest in companies that would otherwise be excluded from other funds that focus on sustainable investment risks. Security selection will be impacted by the combined focus on sustainable investment research assessments and fundamental research assessments including the return forecasts. The strategy incorporates data from third parties in its research process but does not make investment decisions based on third-party data alone.

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